Читать книгу Product Development - David V. Tennant - Страница 15
2 The Role of Marketing in Product Development Corporate Strategy – Strategic Planning
ОглавлениеWhat is strategic planning? This can mean different things to different people. While strategy can be used to guide a company to the next level of performance or change the corporate culture, in product development, strategy can help bring focus. Even corporations get operational plans (short-term focus) mixed up with strategic plans (long-term focus). Essentially, the strategic plan is performed at the highest levels of corporate leadership and may even involve the firm’s Board of Directors.
A strategic plan (corporate strategy) should focus on long-term actions to move the company in a new direction. For years, Coca-Cola was primarily distributing its iconic soft drinks through distributors all over the world. However, as people became more concerned about sugar and corn syrup content in soft drinks, Coke, and other drink makers, decided as a strategic decision to augment their portfolio of products. This now includes Dasani® bottled water, Minute Maid® fruit juices, as well as several tea and coffee products. A conscious decision (or strategy) was made to diversify Coke’s product mix to better serve their customers’ tastes. Their largest competitor, namely PepsiCo, has followed the same strategy and offers not only a variety of beverages, but also various food lines, including Frito-Lay® and Quaker Oats®.
For technology companies, there is a similar approach to offer a continuous stream of new products. If we look at Apple, their initial offering was their innovative computers and operating system. But the firm has evolved to offer a plethora of new and different products. At one point, Apple was bringing in more revenue with iTunes than with their computer business. Added to the mix are the iPhone and iPad. Clearly, their corporate strategy has included diversification and innovation, and is driving the firm to develop new products and services. It is important to note that corporate strategy will drive innovation and provide the funding for R&D, which also includes funding for new products.
Figure 2.1 Where Do Ideas Come From? suggests that companies have many avenues to generate ideas, both internal and external. Usually, anyone within a corporation can offer suggestions and ideas. At some point, the ideas will percolate to senior management, who will decide the merits of each suggestion and whether to direct company resources (people and dollars) in this direction.
Figure 2.1 Where Do Ideas Come From? Figure by David Tennant
This is related to innovation. How do we define innovation? Here is a concise definition:
Innovation is a process by which a domain, a product, or service is renewed and brought up to date by applying new processes, introducing new techniques, or establishing successful ideas to create new value.1
Innovation is what drives new products. How do we innovate? Innovation implies that your firm has a creative spark, or the founder has an idea that no one has yet thought of. Innovation is not something you can learn in school or from a co-worker. Innovation comes from creative people.
Many times, innovation comes from someone being aware of a market direction or trend. Others may think about how technology changes can be incorporated into a new product or software application. Also, new regulatory rulings can fuel a market need for compliance. True innovators are rare (think Nikola Tesla, Elon Musk, or Richard Branson – they all started from scratch) but working together with a partner or team of people can create synergies that, combined, can develop interesting new ideas or even an advancement of an existing idea.
All companies need to exhibit some form of innovation to survive. This is sometimes driven by the company founder, who generates ideas non-stop that have not been thought of before. We can also think of innovation as a form of creativity or imagination, but this is not something we can learn in school or by taking a course. Some people are just more creative than others.
It must be noted that innovation and new products are the future profits and livelihood of the corporation. A company cannot sit on its laurels, it must continue to generate new products. If one looks at a list of the top US companies (Forbes or similar) 40 years ago and compare this list with today’s top companies, you will find the list is very dynamic and different. Table 2.1 shows the Fortune 500 list of companies for 1980 and 2020. They are listed by revenue; however, column three is listed by profitability, which is different.
Table 2.1 Largesr US Companies 1980 vs. 2020 Revenue.1
| Rank | Company2 1980 | 1980 Revenue | Company3 2020 | 2020 Revenue | Most Profitable4 2020 |
|---|---|---|---|---|---|
| 1 | Exxon-Mobil | $ 79.1 | Wal-Mart | $ 524.0 | Apple |
| 2 | Gen. Motors | $ 66.3 | Amazon | $ 281.0 | Microsoft |
| 3 | Mobil | $ 44.7 | Exxon-Mobil | $ 265.0 | Berkshire Hathaway |
| 4 | Ford | $ 43.5 | Apple | $ 260.0 | Alphabet (Google) |
| 5 | Texaco | $ 38.4 | CVS Health | $ 257.0 | Intel |
| 6 | Chevron-Texaco | $ 29.9 | Berkshire Hathaway | $ 255.0 | |
| 7 | Gulf Oil | $ 23.9 | United Healthcare | $ 242.0 | Johnson and Johnson |
| 8 | IBM | $ 22.8 | McKesson | $ 214.0 | Verizon |
| 9 | Gen. Electric | $ 22.4 | AT&T | $ 181.0 | Pfizer |
| 10 | Amoco | $ 18.6 | Amerisource Bergen | $ 180.0 | Wal-Mart |
Table Developed by David Tennant.
Numbers in billions of dollars
Note that some of the companies that were on the list in 1980 are now absent. This is especially notable for the oil companies, and this will continue as the shift from petroleum (gasoline) to electric and alternative-fueled vehicles continues.
New firms in the form of big tech, Facebook, Google, etc. have been displacing more “traditional” companies. By the 2060s we may find a whole new set of innovative companies on the list.
At the turn of the last century (1900) the horse and carriage gave way to the automobile. There were most likely excellent buggy whips for sale, but no matter how excellent your product may be, innovation will ultimately replace it.
If we consider Kodak, which had the lion’s share of the film market, this was completely made irrelevant by digital photography. The major camera producers: Canon, Nikon, Olympus, and others developed highly successful digital cameras which took excellent pictures and no longer required film. Apple’s iPhone further hastened the decline of film in that anyone could take very good pictures with their phone’s camera (including Android phones).
